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Audit cites lax city oversight of Mexic-Arte Museum

Wednesday, September 23, 2020 by Jo Clifton

The city has not done the work needed to develop and oversee its agreements with the Mexic-Arte Museum, according to a report from the Office of the City Auditor. Auditors reported finding a number of contract monitoring weaknesses, raising questions about whether the museum is living up to its agreement with the city. In particular, a failure of oversight by Parks and Recreation Department staff “increases the risk that the city may not receive all contracted services, and it exposes the city to negative public perception.”

Auditors noted that the city has so far allocated more than $20.7 million for the purchase and rehabilitation of the museum at 419 Congress Ave., although the work has not yet begun. City Council’s Audit & Finance Committee is scheduled to hear a report on the audit as part of its regular agenda this morning.

The mission of the Mexic-Arte “is to enrich and educate the community through the collection, preservation and presentation of traditional and contemporary Mexican, Latino, and Latin American art and culture to promote dialogue and develop understanding for visitors of all ages.”

One problem auditors noted was that under the current governance structure, Mexic-Arte answers to both the parks department and the Economic Development Department. The EDD manages the cultural services agreement with the museum. Unlike the parks department, “EDD implemented a tool for managing and tracking all information related to the agreement, such as funding applications and monitoring reports. In addition, EDD staff compared reports submitted by Mexic-Arte to agreement terms and deliverable requirements. Overall Mexic-Arte timely submitted reports and met most of the contractual performance deliverables,” auditors wrote.

Unsurprisingly, auditors recommended that the city manager evaluate the current governance structure of the city’s agreements with the museum “to determine if there is a need to centralize management of the agreements.” In response, management wrote, “PARD will work in cooperation with the Economic Development Department to determine a long-term proposal to identify the most appropriate single department to manage agreements with Mexic-Arte.”

According to the audit, the contract monitoring weaknesses at the parks department “appear to be caused by lack of accountability. PARD management does not have measures in place to ensure that PARD staff perform contract monitoring duties. Also, there are no consequences for Mexic-Arte if they do not submit the required reports timely.” PARD management told auditors that the manager in charge of the agreement with the museum had a particularly heavy workload. Auditors learned that some of the manager’s duties had been assigned to another employee.

Auditors recommended that the director of PARD implement accountability measures for her staff “and put in place a supervisory process for verifying the accuracy of the performance information submitted by Mexic-Arte.” PARD responded by saying that the department has recently reorganized the division overseeing the contract with Mexic-Arte and a single individual at PARD will verify the accuracy of information submitted by the museum.

Auditors also noted that some of the performance measures included in the agreement between the city and the museum were not specific or measurable. For example, one performance measure states that the museum must “allow reasonable loan of artwork in the museum’s permanent collection or public exhibition in public city-owned facilities.” Auditors found the term “reasonable” to be vague and subject to interpretation. In addition, the performance measure does not say exactly what quantities are to be provided to the city. There were several other instances in which the words “reasonable” and “unreasonable” were considered too vague to be enforced.

Auditors recommended that the department work with Mexic-Arte to review current performance expectations and revise the language to make it clear and enforceable. PARD is currently working on that revision, according to its response.

“In 2009, Council authorized $5 million for the rehabilitation of the Mexic-Arte Museum from 2006 voter-approved bonds. However, based on the condition of the facility at the time, staff determined that the funding was not enough to complete the required rehabilitation work,” auditors reported. “In 2018, Council approved an additional $15 million for the rehabilitation of the Mexic-Arte Museum from 2018 voter-approved bonds, bringing the total of available funding to $20 million. At the time of this audit, the rehabilitation work had not started. According to City and Mexic-Arte staff, the City and Mexic-Arte management are currently negotiating the agreement that will guide how to apply the approved rehabilitation funds.”

Neha Sharma was the audit manager, and Henry Katumwa served as auditor-in-charge.

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Photo by Larry D. Moore, CC BY-SA 3.0.

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